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City Research Online City, University of London Institutional Repository Citation: Iosifidis, P. (2016). Media Ownership and Concentration in the United Kingdom. In: Noam, E. (Ed.), Who Owns the World's Media?: Media Concentration and Ownership around the World. (pp. 425-452). Oxford: OUP. ISBN 9780199987238 This is the accepted version of the paper. This version of the publication may differ from the final published version. Permanent repository link: https://openaccess.city.ac.uk/id/eprint/6036/ Link to published version: http://dx.doi.org/10.1093/acprof:oso/9780199987238.001.0001 Copyright: City Research Online aims to make research outputs of City, University of London available to a wider audience. Copyright and Moral Rights remain with the author(s) and/or copyright holders. URLs from City Research Online may be freely distributed and linked to. Reuse: Copies of full items can be used for personal research or study, educational, or not-for-profit purposes without prior permission or charge. Provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. City Research Online: http://openaccess.city.ac.uk/ [email protected] OUP-FIRST UNCORRECTED PROOF, January 7, 2015 16 Media Ownership and Concentration in the United Kingdom PETROS IOSiFiDiS INTRODUCTION Excessive media concentration in the United Kingdom is a public concern since it can endan- At a time when media companies are becoming ger media pluralism and diversity. For these major actors in international commerce, and reasons the United Kingdom has introduced when cable, satellite, and digital platforms are media ownership rules to preserve economic increasingly globalizing media markets, ques- goals (open competition) and social aims (plu- tions about the possible effects of media concen- ralism and diversity). Media regulation in the tration on the traditional role of the media have United Kingdom is governed by the provisions increasingly come to the fore. of the Communications Act (2003), which In the United Kingdom, concentration of mostly applies to electronic media, and the media ownership is a market reality, as evidenced Enterprise Act (2002), which applies to newspa- by the reduction of the number of companies in pers. The Office of Communications (Ofcom), several traditional media sectors, such as print and the new super-regulatory agency set up in 2003 broadcasting, and the growing number of media to replace five existing regulatory bodies—the firms that are owned by the same parent company. Independent Television Commission, the Radio The intensification of concentration can also be Authority, the Office of Telecommunications, viewed as a lever to promote market liberaliza- the Broadcasting Standards Commission, and tion that would nurture national champions. Both the Radiocommunications Agency—is respon- “New Labor” governments (1997–2010) and the sible for enforcing this legislation. subsequent Conservative-Liberal Democrat coa- British media ownership rules are sector spe- lition government have promoted liberalization. cific: the main objectives for establishing media 424 • 16-Noam-Chap16.indd 424 07/01/15 8:00 AM OUP-FIRST UNCORRECTED PROOF, January 7, 2015 ownership rules for newspapers, radio, and tele- support from several major players.1 This sub- vision broadcasting have been to protect plural- stantial liberalization and reduction of cross- ity of viewpoints and provide citizens access to a media ownership rules has been accompanied wide range of sources of news and information. by an increased dependence on competition law, The media ownership rules are separate from as well as the extension of self-regulation wher- the merger regime, which applies to all sectors of ever possible. the economy, including media markets. The pri- In the United Kingdom, media ownership mary purpose of the merger regime is to retain is a subject of much political controversy— and enhance competition, but it may indirectly particularly when it involves media magnate protect plurality by preventing consolidation in a Rupert Murdoch, whose News Corporation has particular market on competition grounds. The significant market shares in the US, UK, and media public interest test, introduced in 2006, Australian media markets (and in others as well). allows the Secretary of State for Business, Inno- The issue of one entity controlling such a large vation, and Skills to intervene in newspapers, proportion of the United Kingdom’s newspapers broadcasting, and cross-media mergers if they and broadcasting interests is an area of public raise public interest concerns. The UK regula- concern—particularly when the owner(s) has tory regime for communications law and policy a close interest in the political agenda of these is also determined by EU legislation. Examples newspapers.2 In the 1980s, the Thatcher govern- include the laws governing the liberalization of ment allowed News International to take over UK media and communications law and policy The Times and Sunday Times without referring (see below), a process strongly influenced by EU it to the Monopolies and Mergers Commission provisions that increasingly foreground compe- (MMC), even though the company already con- tition law as a means of promoting pluralism. trolled The Sun and the (now-defunct) News of The Communications Act (2003) freed up the World. After its defeat in the 1992 elections, the communications industry far more than was the Labor Party realized that it was vital to have expected, removing most of the ownership regu- Murdoch on board. Murdoch’s papers, of course, lations that characterized British broadcasting, realized this as well: The Sun heralded its role as it was thought these deprived companies of in the Conservative John Major’s 1992 victory the economies of scale and scope required to with the headline “It’s The Sun Wot Won It.” expand into foreign markets. Rules preventing An example of the allegedly close relationship the joint ownership of television and radio sta- between Murdoch and former Prime Minister tions were removed; Rupert Murdoch’s News Tony Blair was the former’s phone call in 1998 to International, the UK newspapers arm of News the Prime Minister enquiring about prospects Corporation, was allowed to expand into tele- for further developing News International’s vision broadcasting; and non-European own- interests in the United Kingdom. Despite this, ership of broadcasting assets was permitted, when Murdoch broadcasting giant British Sky effectively clearing the field for takeovers by Broadcasting (BSkyB) obtained a 17.9% stake international firms. The decisions to permit the in the terrestrial broadcaster ITV in 2008, the acquisition of Five by print publishers and to lift Blair government and the Court of Appeal made the ban on non-European ownership were par- BSkyB reduce that to a 7.5% stake; BSkyB had to ticularly controversial, though these provisions sell off the difference at a loss. proved the Blair government’s free market cre- In recent years, emerging issues have been dentials to media owners and received strong framed in terms of competition considerations. 1. Freedman, Des. The Politics of Media Policy. Cambridge: Polity Press, 2008, 119–120; and Tunstall, Jeremy. “The BBC and UK Public Service Broadcasting.” Reinventing Public Service Communication: European Broadcasters and Beyond. Iosifidis, Petros, ed. Basingstoke: Palgrave Macmillan, 2010, 145–157. 2. Douglas, Torin. “Analysis: Murdoch and Media Ownership in UK.” Dec. 23, 2010. July 2, 2012. <http://www.bbc.co.uk/ news/uk-12062176>. United Kingdom • 425 16-Noam-Chap16.indd 425 07/01/15 8:00 AM OUP-FIRST UNCORRECTED PROOF, January 7, 2015 One such case in 2011 was the proposed acqui- regarding its expansionist strategies have sition by News International, a subsidiary of been partly addressed with the suggestion by News Corporation, of the remaining 61% of the Conservative-Liberal Democrats coalition satellite broadcasting networks in the United government to reduce BBC Online’s budget by Kingdom that BSkyB did not already own. The 25% and to freeze BBC license fee income until proposal prompted an unprecedented response 2017. However, there are voices that argue that from nearly all non-News International owned any cut to the BBC license fee raises fundamen- companies in the United Kingdom, both private tal questions about the BBC’s independence and public. The companies wrote a letter asking from the government.4 the UK Business Secretary to refer the case to Ofcom on the basis that the takeover would PRINT MEDIA have “serious and far-reaching consequences 3 for media plurality.” In the United Kingdom, Newspapers News International already owns about 34% of the newspaper market, and with the BSkyB There are five national daily “quality” titles— deal, it would have controlled two-thirds of pay The Guardian, The Independent, The Financial television. Eventually, in July 2011 the US$16 Times, The Times, and The Daily Telegraph— billion (£10 billion) BSkyB bid was abandoned each owned by a different newspapers group. in the light of the phone hacking scandal— In addition, there are two national daily “mid- “Hackgate”—at the Murdoch tabloid News of market” titles, the Daily Mail and the Daily the World. Employees of News of the World and Express. Then come the three national daily several other UK papers under the News Inter- “tabloids”: The Sun, the Daily Mirror, and the national banner have been accused of engaging Daily Star. The Sun belongs to the same group in phone hacking, police bribery, and exercis- that owns The Times, News International. ing improper influence in the pursuit of stories. Finally are the 10 Sunday titles—Sunday Mirror, Given that News International also owns a 7.5% The People, Sunday Mail, Daily Star Sunday, Mail stake of the main commercial terrestrial broad- on Sunday, Sunday Express, The Sunday Times, caster ITV plc, this acquisition would have The Sunday Telegraph, The Observer, and The raised competition concerns as well as concerns Independent on Sunday.

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